Insurance Benefits For European Clean Energy Initiatives

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The European Union must face the reduction of solar energy capacity and the negative costs that affect project yields, a group of solar and renewable energy groups told the European Council on Tuesday (1 August). [Solaris/Pixbay]

Insurance Benefits For European Clean Energy Initiatives

The European Union must face the reduction of solar energy capacity and the negative costs that affect project yields, a group of solar and renewable energy groups told the European Council on Tuesday (1 August).

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The solar industry is increasing in Europe, with 40 gigawatts (GW) installed in 2022, almost 50% higher than in 2021.

“Although 2023 is likely to record another summer record for solar generation,” the group wrote in a letter addressed to EU Energy Commissioner Kadri Simson, they warned that problems with the electricity grid, lack of flexibility in the system and variable costs have a swing. . negative impact on the project.

“The energy and climate crisis require us to increase the amount of solar energy to an unprecedented level. More than ever, it is necessary to act to increase solar development and reduce energy waste”, wrote the 19 groups , of which 16 are representative companies in EU countries. Other signatories represent the EU as a whole, Norway and Switzerland.

A major concern for the industry is that solar power is increasingly being disconnected from the grid at times of low demand, sometimes in favor of more expensive electricity generation.

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This year has seen reductions in EU countries, particularly Poland and the Czech Republic, which have halted solar power due to unexpectedly low demand while electric power plants continue to produce.

“Due to the reliance on so-called ‘baseload’ and the lack of flexibility of clean systems, a lot of electricity is being burned – and clean, cheap solar power is being destroyed,” read the joint letter.

In addition, the company warns that unaddressed changes in energy costs and negative costs “too often” harm investment in new solar assets.

“Extreme price fluctuations, today for example through price spikes or negative prices, will become the new norm,” the group wrote, arguing that this would mean high uncertainty and the loss of potential income for renewable energy. .

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Many solutions to this issue have been presented in the EU law to increase the production of renewable energy, which was adopted in 2018. However, this has not been properly implemented in many EU countries.

To help tackle the problem, the group is calling on EU countries to improve network readiness and speed up the commissioning and construction of grid infrastructure.

With the increase in renewable energy expected, the network cannot stand still and must start growing, with anticipated investment, they argue.

Flexibility must also be introduced throughout the electricity system, from adapting to the grid to making buildings respond to price signals. In addition, Europe needs additional storage capacity and incentives for using electricity when demand, and therefore prices, are low, such as at night.

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The group also called for strategic approach and dual energy capture to be the focus when it comes to hybrid projects where solar power generation is combined with storage or other generation sources, such as wind power.

In addition, investors need to get the right signals and know that investing in solar is sustainable over the long term, the group said.

This can be done through an agreement for differentiation, which provides a guaranteed return for renewable energies and is proposed by the European Commission as a way to stabilize variable energy prices in the electricity market reform proposed in March 2023.